Disney has had a rough year. The stock is down nearly 35% year-to-date, impacted by a combination of inflation, disappointing Q2 results and Disney+’s lack of profitability and disappointing subscriber numbers. Where has Disney+ gone wrong? “Disney Plus was fast out of the gate,” said Cheddar News senior reporter Michelle Castillo. “I did applaud their strategy of doing more quality content and fewer shows than just flooding the market with a lot of programming. But those shows cost a lot of money and they're not simple.” In a bid to turn things around, Disney for the first time is adding R-rated movies to its streaming service, and users will start seeing ads later this year. 

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Stock of the Day: Disney Looks to Turn a Dismal 2022 Around

Welcome back to Cheddar News is closing bell time now for our stock of the day and today we're looking at Disney as the media empire looks to turn around what's been a disastrous 2022 so far Now, Disney stock has had a dismal performance in the first half of the year. It's down about 35% a year to date, following disappointing second quarter earnings inflation concerns and the fact that its flagship streaming service, Disney Plus Has failed to turn a profit. Now. Disney's direct consumer segment, which includes Disney Plus, that lost about $900 million $290 million 2021, Disney has spent tens of billions of dollars producing high profile original content, including series like the Mandalorian, Obi wan Kenobi and the upcoming ANDAR. But now investors and analysts are worried that growth could be slowing for Disney Plus. Take a look at the number of subscribers for Disney Plus, they're up to almost 138 million as of last quarter. And while Disney Plus has added more than 100 million subscribers in two years, the rate of growth isn't happening as quickly as Disney would hope Ceo bob traffic is under pressure to keep growing and he set an ambitious goal for that saying the company has a target of between 232 160 million subscribers by september 2024. That's possibly more ambitious of his goal of making Disney Plus profitable by that same time. That goal has been described as unrealistic by some investors. What do you think about this? You know, this is a really good question. Um, Disney Plus was fast out of the gate. I did applaud their strategy of doing more quality content than just um, and fewer shows than just flooding the market with a lot of programming. But those shows cost a lot of money and they're not simple. If you think about their blockbusters, they were kind of hoping that they would pull in some of the marvel movies to put on the service. You know that Disney Plus is getting its first r rated movies with Deadpool and during the service as well. So they thought they'd have a library of content to really include as well as the new original shows. But things have been slowed down by the pandemic. Things are being released a little slower than usual. They even did that tier where you had to pay a little extra to watch the movie same day on the platform as in theater. So it's a little bit shaky for them. And there's just so many more competitors in the market. Um, everyone's talking about competition these days and it's pretty fierce, even though the company like Disney has such household recognition. You have Disney Plus, I do have Disney Plus and I, you and I have talked about this before, There are two streamers that I'm not willing to get rid of and that is Disney Plus and HBO max. I think the content that they keep putting out, it's not just quantity here, it really is quality shows. I mean even if you're not a Star Wars fan or a marvel fan they're made so well, it's so character driven, the stories are told so well, I think Disney is doing a really good job with the content. I do think it will continue to grow. What do you think? Um they are going to add an ad supported tier next year? And I think like netflix are kind of hoping that if they come in even a lower price point families are gonna want to stay watching. Um they've had some success with the Hulu model which is actually growing pretty rapidly. But again, um Disney Plus wasn't that expensive to begin with, it's not one of the more expensive ones in the market. HBO was much more expensive. Netflix is also one of the most expensive on the market. I don't know how much cheaper they could make it to get people to watch and stay subscribed, especially cause families, I think it rates pretty high on the list, especially if you have younger kids. Absolutely. And we're now seeing Disney trying to expand its streaming user base with some big changes for the first time. Disney like Michelle just mentioned is adding R rated movies to its streaming service, Popular films like Deadpool, Deadpool two and Logan becoming the first adult flicks to land on Disney Plus the additions come as Disney works to emphasize entertainment for adults on its platform in the hopes of making the service more well rounded. The films launched on the streaming service this past friday, Disney Plus has settings in place to screen adult content from younger audiences. Meanwhile, growing interest in hulu also helping Disney consumers have the option of bundling their hulu. Disney Plus and ESPN plus subscription For a monthly fee of $14, which helps save money for Americans with a tight budget, it's about half the price of buying the subscriptions individually. Disney is actively trying to increase its revenue by getting into ad supported streaming Disney Plus, users will see ads beginning in late 2022. Disney's other key sectors is its parks division, which is also seeing some big changes this week on Wednesday florida's, Disney world will unveil an updated bracelets for guests called Magic Band Plus now this wristband can do even more from connecting to your smartphone to unlocking your hotel room. Of course on Disney resorts, the bracelets will light up at night. They will let you interact with key areas of the park, which even includes a scavenger hunt for the park's 50th anniversary, Despite the down year for Disney Stock, it's actually in the green over the last month, you see it's up 6.2% right now. We'll get a better sense of how the company is doing when it reports third quarter earnings in about three weeks.